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3. We are not at present able to state what the transmission of the £700,000 will have cost to the Government of Hong Kong, as with the view of saving cost in exchange the greater part of the amount was transferred to New York in anticipation of the due date, and these advances will of course carry Bank rate of interest. There will also be the charge of our Agents, viz. 1/16 of 1%, for carrying through the transaction. On the other hand there will be a set off of the amount of interest earned on the money moved to New York in anti- cipation of the due date. We are not aware of the circum- stances in which the Government of Hong Kong agreed to pay the money in New York, but it has necessarily been a more costly operation than if the agreement had been that the Chinese Minister should draw upon us for the amount, the effect of which would have been to throw the cost of the exchange operations on the Chinese Minister or his nominee.
4. The Secretary of State will probably think it desirable to telegraph to the Governor of Hong Kong that the two payments were duly effected on the 6th October, but it may be better not to say anything at present a8 to the cost of the operation.
5. Now that the payments have been made I beg to refer to our letter of the 4th of July and to say that it is essential that the necessary legislative provision to enable the Government of Hong Kong to raise the money which is required to repay us the advances which we have made should be passed at the earliest possible moment.
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